Loan Programs 

Years you plan to stay in the home	Recommended Program
1-3 years	3/1 ARM, 1 year ARM or 6 month ARM
3-5 years	5/1 ARM
5-7 years	7/1 ARM
7-10 years	10/1 ARM, 30 year fixed or 15 year fixed
10+ years	30 year fixed or 15 year fixed

Loan Program	Advantages	Disadvantages
Fixed Rate Mortgages 30 year fixed 15 year fixed	Monthly payments are fixed over the life of the loan Interest rate does not change Protected if rates go up Can refinance if rates go down	Higher interest rate Higher mortgage payments Rate does not drop if interest rates improve
Loan Program	Advantages	Disadvantages
Adjustable Rate Mortgages 10/1 ARM 7/1 ARM 5/1 ARM 3/1 ARM 1 year ARM 6 month ARM 1 month ARM	Lower initial monthly payment Rates and payments may go down if rates improve May qualify for higher loan amounts 30 year term, no balloon payment	More risk Payments may change over time Potential for higher payments if rates increase
Loan Program	Advantages	Disadvantages
Balloon Mortages 7 year 5 year	Lower initial monthly payment Lower payment for a predetermined period of time Many balloon mortgages offer the option to convert to a new loan after the initial term	Risk of rates being higher at the end of the initial fixed period Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term
Loan Program	Advantages	Disadvantages
First Time Buyer Programs	Lower down payment Easier to qualify Lower rates may be available	May be subject to income and property value limitations Some government subsidized programs may generate a recapture tax if you sell the house too soon Education courses may be required to qualify for these loans
Loan Program	Advantages	Disadvantages
Interest Only Programs	You have several payment options Lower monthly payments Qualify for a higher loan amount Qualify at the interest only payment Option to pay the full normal payment Interest only payments for up to ten years	Higher rates Principal loan balance will not decrease during the interest only payment period Payment will be higher for the remaining term
Loan Program	Advantages	Disadvantages
Home Equity Fixed Loan	Fixed payments Interest may be tax deductible Get cash out for any purpose	Higher interest rates compared to first mortgage Harder to refinance your first mortgage Interest is paid on the entire loan amount, compared to an equity line of credit